Beijing wants more outfits like Temu circulating around the world • The Register

China’s Ministry of Commerce has issued a policy calling for the massive expansion of the country’s cross-border e-commerce industry.

The strategy paper published on Tuesday identifies cross-border e-commerce as an important contributor to the development of China’s economy and therefore deserves support to ensure its expansion.

Beijing wants its local governments to cooperate with e-commerce platforms and create zones dedicated to helping such businesses grow and prosper.

Financial institutions are encouraged to provide financial support to China’s e-commerce activities and to ensure that they provide efficient and low-cost foreign exchange settlement services.

Also part of Beijing’s plan is to help e-commerce operators set up offshore warehouses and participate in offshore trade shows.

The ministry wants Chinese e-commerce players to embrace technology as they expand, so it has called for the use of cloud, artificial intelligence, big data and analytics tools to support its expansion. The mention also applies to cross-border data flows. China is committed to ensuring that customer data relating to its citizens does not leave its borders, and this policy requires careful compliance with applicable laws.

The program also includes active participation with global economic blocs and institutions. The Universal Postal Union is also mentioned, recognizing that it is reviewing payment rules for parcels sent abroad. Previous postal regulations made it very cheap for developing country exporters to ship goods to wealthier jurisdictions, but that has changed in recent years – partly in response to e-commerce.

It’s easy to see why China wants to promote its e-commerce sector: it’s growing rapidly and powering local manufacturers and platforms that sell their goods.

The best example of the rapid development of this sector is the rapid development of online tattoo bazaars Temu and Shein – within a few years they have become significant players on a global scale. Both platforms were recognized this year as very large online platforms (VLOPs) under the EU’s Digital Services Act, meaning they have over 45 million users on the continent alone.

Both companies thrived largely on their prices, which undercut those of domestic rivals, raising concerns about whether they were competing fairly. Whether they take their suppliers’ ethical practices seriously is also of interest to regulators outside China.

Beijing’s policy also calls for the development of more large global brands.

One option that has not been mentioned is to promote the development of a real-world retail presence for Chinese brands. It so happens that your correspondent recently visited an Alibaba store in a shopping mall in Barcelona. It was not a pleasant experience: a shoddy tattoo at alarmingly low prices, in a store that paid almost no attention to design and merchandising. Perhaps fixing this will be Beijing’s next step. ®